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Monday, April 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

Attorney Gets Prison for|Cheating Disabled Vets

HOUSTON (CN) - A Houston attorney was sentenced to 46 months in federal prison and ordered to pay $2.3 million in restitution for ripping off disabled veterans for whom he served as a fiduciary or court-appointed guardian.

Joe B. Phillips pleaded guilty in September the day jury selection was to begin for his trial, the U.S. Attorney's Office said.

His wife and co-defendant Dorothy Phillips pleaded guilty in April to conspiracy and making a false statement on an income tax return. She was sentenced last week, also to 46 months, and ordered to pay the same amount of restitution to the Veterans Administration.

Dorothy Phillips worked as her husband's legal assistant, prosecutors said.

"Joe Phillips was either appointed by the VA to serve as a fiduciary or appointed by the courts to serve as a guardian for a number of incompetent military veterans," prosecutors said in the statement.

"In that role, he opened and maintained bank accounts for these veterans to receive benefit payments from the VA to pay their debts and living expenses.

"He was required to submit annual accountings to the VA and the courts detailing expenses paid on behalf of his veteran client for the period covered in the accounting statement.

"As a federal fiduciary, he received as compensation for his services, 4 percent of the VA benefits paid to his veteran client and a 5 percent commission from the disbursements and income excluding VA and Social Security Administration benefit payments for [those] whom he served as court appointed guardian.

"Phillips and his wife submitted false accounting statements to the VA in Houston, which included fraudulent verification forms for bank information for a number of his veteran clients.

"He and his wife also unlawfully transferred money from bank accounts Phillips maintained for his veteran clients on at least three occasions to accounts in his and his wife's name.

"He did not file a proper accounting with the court or the VA for the transfer of these funds.

"Dorothy Phillips admitted she gambled extensively at casinos in Louisiana between 2003 and 2007."

Both Joe and Dorothy Philips signed a phony 2007 tax return that concealed income, prosecutors said. (Graph 5)

The Phillips were both ordered to pay $282,000 restitution to the IRS.

They are free on bond until they are ordered to report to prison "in the near future," the U.S. Attorney's Office said.

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